Corinthian Colleges files bankruptcy to facilitate wind-down

(Reuters) – Corinthian Colleges Inc, the for-profit college operator hamstrung by federal and state investigations, filed for bankruptcy in Delaware on Monday, about a week after announcing it would shutter its remaining campuses and cease operations.

Santa Ana, Calif.-based Corinthian listed debts of more than $143 million and assets of just $19.2 million, saying in court papers the bankruptcy would help it “complete the orderly wind-down of its operations.”

Corinthian was in hot water for allegedly misleading students and investors about its finances and job placement rates. In April, the Department of Education fined Corinthian $30 million for misrepresenting job placement rates to students in its Heald College system, and determined that Heald would no longer be allowed to enroll students.

On April 26, the company announced it would close its remaining campuses and work to find other schools for roughly 16,000 affected students.

Late last year, Corinthian sold off more than half its campuses to non-profit education provider ECMC Group Inc. Thirteen campuses, included Everest and WyoTech in California, remained open up to the April 26 announcement.

For-profit education companies such as Corinthian, Apollo Education Group Inc and Strayer Education Inc, have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates.

Founded in 1995, Corinthian was one of the largest U.S. for-profit college operators, at one point employing more than 10,000 people, and running more than 100 campuses with 74,000 total students, court papers show.

In court briefs, the company reported around $100 million outstanding under a loan agreement on which Bank of America is agent. Lenders signed a number of forbearance agreements throughout the last year.

The company is represented in bankruptcy by lawyers at Richards Layton & Finger. FTI Consulting’s William Nolan was tapped as its chief restructuring officer.